Hampshire Police said a 24-year-old man from Bitterne in Southampton was taken into custody on Sunday morning.
Delia Hughes, 85, was found at her Atlantic Close flat in Ocean Village, Southampton, on 18 August.
The arrest comes after police projected CCTV images of a of a "significant witness" they wanted to speak to on buildings in the city over the weekend.
Detectives also used Bluetooth mobile messaging and screenings before feature films in cinemas to appeal for information.
They believe the man, pictured on CCTV close to her home on the morning of her murder, holds vital clues to the investigation.
A police spokeswoman said: "A man remains in police custody at this time and is being interviewed by detectives from the Hampshire Major Investigation Team."
A 29-year-old woman and a 37-year-old man who were previously arrested on suspicion of murder have been bailed pending further inquiries.
Mrs Hughes was originally from Blackpool in Lancashire but had lived in Southampton for the past 17 years.
Before she retired, she had worked as a supervisor for Littlewoods.
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